Report on post-approval status of approved funding proposals · Energy efficiency green bond in...

Report on post-approval status of approved funding proposals

Meeting of the Board 30 September – 2 October 2017 Cairo, Arab Republic of Egypt Provisional agenda item 14(f)

GCF/B.18/08

14 September 2017

Summary

This document provides an analysis and update on the conditions of the 43 approved

projects and programmes in the GCF portfolio; and an update on any specific issues which

have arisen in relation to their post-approval processing since the seventeenth meeting of

the Board.

The document reports the status of approved projects as at 20 August 2017.

GCF/B.18/08 Page b

Table of Contents

I. Introduction 1

II. Post-approval process and status of fulfilment of conditions 1

2.1 Stages of post-approval process 1

2.2 Portfolio status update by post-approval milestone 2

III. Challenges 6

3.1 Challenges in portfolio management 6

Annex I: Status of the fulfilment of the conditions applied to approved projects and programmes 9

GCF/B.18/08 Page 1

I. Introduction

1. As at its seventeenth meeting, the Board had approved 43 projects and programmes with more than 250 project-/programme-specific conditions attached. At its fourteenth meeting, the Board requested the Secretariat to report to it at each meeting on the status of the fulfilment of all conditions decided by the Board in its approval of the relevant projects or programmes, and to seek further guidance from the Board in the event that the Secretariat determines that any such condition is technically, financially or legally unimplementable.1 In decision B.16/02, the Board asked the Secretariat to prepare a report on the conditions and time frames of all projects approved by the Board and the status of implementation for consideration by the Board no later than its eighteenth meeting, and at its seventeenth meeting further requested the Secretariat to provide an update on the status of the fulfilment of conditions attached to approved funding proposals. 2

2. In response to such requests, this document sets out information relating to the post-approval process, the status of the fulfilment of conditions related to each project and the challenges faced by the Secretariat in implementing the post-approval process.

II. Post-approval process and status of fulfilment of conditions

2.1 Stages of post-approval process

3. The major milestones in the post-approval process, following approval by the Board of a funding proposal, are as follows:

(a) Signing of a funded activity agreement (FAA);

(b) Effectiveness of an FAA; and

(c) Disbursement under an FAA.

4. In order to reach each milestone, various steps need to be completed. Accordingly, the portfolio of approved projects and programmes can be broken down into those funding proposals which are:

(a) Pending FAA signing;3

(b) Pending FAA effectiveness;

(c) Pending disbursement; and

(d) Disbursed and under implementation.

5. Funding proposals pending FAA signing. The two main work streams under this stage are the negotiation of the FAA and the fulfilment of any conditions to be met prior to FAA signing, as may be set by the Board and/or agreed between the Secretariat and the relevant accredited entity in the relevant term sheet. In many cases, FAA negotiations cannot begin because the accreditation master agreement (AMA) with the relevant accredited entity has not been finalized. In other cases, the FAA negotiations may not have begun owing to ongoing technical discussions relating to an approved funding proposal or because the relevant accredited entity already has one FAA under negotiation. The FAA is typically required to be

1 Decision B.14/07, paragraphs (i) and (j). 2 Decision B.17/21 Annex III. Immediate actions that the Secretariat will implement 3 FAA signing in turn can be pending due to the accreditation master agreement not having become effective.

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signed 180 days of the date of Board approval, the date on which the accredited entity has obtained all internal approvals or the date of effectiveness of the AMA, whichever is later.

6. Funding proposals pending FAA effectiveness. The signing of an FAA, in itself, does not create legal rights or obligations on the part of either the GCF or the accredited entity. Such rights and obligations are created once the FAA is effective. In order to reach effectiveness, the accredited entity is required to fulfil any conditions precedent to effectiveness. These may be set by the Board and/or agreed between the Secretariat and the accredited entity. Accredited entities are typically required to satisfy such conditions within the prescribed period of time set in the Board’s decision and/or the signed FAA. This period of time may vary depending on the nature of the project and the relevant conditions, and is usually set at 90 days.

7. Funding proposals pending disbursement. The effectiveness of an FAA entitles the accredited entity to request disbursement of GCF proceeds once it has fulfilled the relevant conditions precedent to disbursement set out in the FAA. Such conditions may be set out in the decision accrediting the relevant entity, set by the Board in the decision approving the funding proposal and/or agreed between the Secretariat and the accredited entity. One key condition precedent to disbursement is the submission by the accredited entity of a request for disbursement.

8. Funding proposals disbursed and under implementation. Once a disbursement has been made, the accredited entity is able to begin project implementation. Subsequent disbursements may be conditional upon the fulfilment of other requirements, as may have been set by the Board or agreed between the Secretariat and the accredited entity. These are monitored by the Secretariat and confirmed by the Secretariat prior to authorizing subsequent disbursements.

2.2 Portfolio status update by post-approval milestone

2.2.1 Funding proposals pending funded activity agreement signing

9. Eleven approved projects and programmes, accounting for 25.5 per cent of the total portfolio, came from the accredited entities that have not finalized an AMA with the GCF. To address this issue, the Board agreed at its seventeenth meeting to limit to a certain extent the submission of funding proposals from the accredited entities that have not signed the AMA for the Board’s consideration (decision B.17/09). The Board also extended the deadline on signing the AMA imposed on the World Bank and the European Investment Bank (EIB) as part of the approvals of FP038 and FP044 to prevent the approval of these two projects lapsing on 4 August 2017. The list of projects and programmes without an underlying signed AMA is provided in table 1. For FP026, the AMA with Conservation International Foundation has been signed but is not yet effective, while the signing of the AMA with EIB is pending the accredited entity’s approval at the time of the reporting.

Table 1: Projects and programmes with pending accreditation master agreement signing

Project reference

AE Project title Country Approved

amount (USD)

FP006 IDB Energy efficiency green bond in Latin America and the Caribbean

Mexico 22,000,000

FP009 IDB Energy savings insurance for private energy efficiency investments by small and medium-sized enterprises

El Salvador 21,700,000

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FP012 WB Africa Hydromet program – strengthening climate resilience in sub-Saharan Africa

Mali 22,750,000

FP014 WB Climate Adaptation and Mitigation Program for the Aral Sea Basin

Tajikistan, Uzbekistan

19,000,000

FP020 IDB Sustainable energy facility for the Eastern Caribbean

Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia and Saint Vincent and the Grenadines

80,000,000

FP021 AFD Senegal integrated urban flood management project

Senegal 16,594,905*

(EUR 15,000,000)

FP026 CI

/EIB Sustainable landscapes in Eastern Madagascar

Madagascar 53,500,000

FP030 IDB Catalyzing private investment in sustainable energy in Argentina – Part 1

Argentina 133,000,000

FP038 EIB GEEREF NeXt Multiple countries 265,000,000

FP042 AFD Irrigation development and adaptation of irrigated agriculture to climate change in semi-arid Morocco

Morocco 22,126540*

(EUR 20,000,000)

FP044 WB Tina River hydropower development project

Solomon Islands 86,000,000

Total 741,671,445*

Abbreviations: AE = accredited entity, AFD = Agence Française de Développement, CI = Conservation International Foundation, EBRD = European Bank for Reconstruction and Development, EIB = European Investment Bank, IDB = Inter-American Development Bank, WB = World Bank.

* EUR/USD = 1.106327, provided by the Interim Trustee (30 June 2017).

10. In addition to the foregoing, there are a number of approved projects and programmes with entities that have signed AMAs which are not yet effective. These are set out in table 2. Upon effectiveness of an AMA, negotiations on related FAAs can commence.4

Table 2. List of projects and programmes pending accreditation master agreement effectiveness

Project reference


amount (USD)

FP004 KfW Climate resilient Infrastructure mainstreaming in Bangladesh

Bangladesh 40,000,000

FP008 ADB Urban water supply and wastewater management project in Fiji

Fiji 31,040,000

FP017 CAF Climate action and solar energy development programme in the Tarapaca Region in Chile

Chile 49,000,000

FP027 DB Universal green energy access programme

Multiple countries 80,000,000

FP036 ADB Pacific Islands renewable energy investment program

Pacific Islands 17,000,000

FP041 KfW Simiyu climate resilience project Tanzania (United

Republic of)

113,619,783* (EUR 102,700,000)

4 Notwithstanding this, FAA negotiations with KfW in relation on FP004 have commenced and FAA negotiations with

NABARD in relation to FP045 will soon begin.

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FP045 NABARD

Ground water recharge and solar micro irrigation to ensure food security and enhance resilience in vulnerable tribal areas of Odisha

India 34,357,000

Total USD 354,097,000

Abbreviations: AE = accredited entity, ADB = Asian Development Bank, DB = Deutsche Bank AktienGesellschaft, KfW = Kreditanstalt für Wiederaufbau, NABARD = National Bank for Agriculture and Development.


11. Funding proposals under FAA preparation/negotiation: a total of six projects are at the FAA preparation/negotiation stage at the time of reporting. These include FP003 from Centre de Suivi Ecologique and FP035 from the Secretariat of the Pacific Regional Environment Programme, both of whose deadline for FAA execution was extended by the Board at its seventeenth meeting.

Table 3. List of projects and programme under negotiation and/or preparation

Project reference


Amount (USD)

FP003 CSE

Increasing the resilience of ecosystems and communities through the restoration of the productive bases of salinized lands in Senegal

Senegal 7,610,000

FP025 EBRD Sustainable energy financing facilities

(SEFF) Multiple

countries 378,000,000

FP029 DBSA SCF capital solutions South Africa 12,222,222

FP035 SPREP Climate information services for resilient development in Vanuatu

Vanuatu 22,953,000

FP040 EBRD Tajikistan: scaling up hydropower sector climate resilience

Tajikistan 50,000,000

FP043 EBRD Saïss water conservation project Morocco 35,369,274*

(EUR 31,970,000)

Total 506,154,4965

Abbreviations: AE = accredited entity, CSE = Centre de Suivi Ecologique, DBSA = Development Bank of Southern Africa, EBRD = European Bank for Reconstruction and Development, SPREP = Secretariat of the Pacific Regional Environment Programme.


2.2.2 Funding proposal pending funded activity agreement effectiveness

12. One FAA has been executed but is not effective at the time of reporting. The FAA for FP039 was signed on 16 August 2017 and will reach effectiveness under the timeline as set out in the FAA.

Table 4. List of projects and programmes pending funded activity agreement effectiveness

Project reference


amount (USD) FP039 EBRD Egypt renewable energy financing framework Egypt 154,700,000

Total 154,700,000

5 EUR/USD = 1.106327, provided by the interim Trustee (30 June 2017).

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Abbreviations: AE = accredited entity, EBRD = European Bank for Reconstruction and Development.

2.2.3 Funding proposals pending disbursement

13. 18 FAAs have been executed and become effective, 7 of which have not reached the disbursement stage.6 The accredited entities responsible for such projects still need to meet the conditions precedent to the first disbursement. In most cases this requires the submission of an indicative disbursement schedule and a copy of the subsidiary agreement(s) with executing entities, as well as a request for disbursement.

Table 5. List of projects and programmes with a signed and effective funded activity agreement which have not reached disbursements

Project reference


amount (USD)

FP002 UNDP Scaling up the use of modernized climate information and early warning systems in Malawi

Malawi 12,295,000

FP011 UNEP Large-scale ecosystem-based adaptation in the Gambia: developing a climate-resilient, natural resource based economy

Gambia 20,546,756

FP013 UNDP Improving the resilience of vulnerable coastal communities to climate change related impacts in Viet Nam

Viet Nam 29,523,000

FP018 UNDP Scaling-up of glacial lake outburst flood (GLOF) risk reduction in Northern Pakistan

Pakistan 36,960,000

FP022 ADA Development of argan orchards in degraded environment – DARED

Morocco 39,292,600

FP033 UNDP Accelerating the transformational shift to a low-carbon economy in the Republic of Mauritius

Mauritius 28,210,000

FP034 UNDP Building resilient communities, wetlands ecosystems and associated catchments in Uganda

Uganda 24,140,000

Total 190,967,356

Abbreviations: AE = accredited entity, ADA = Agency for Agricultural Development of Morocco, UNDP = United Nations Development Programme, UNEP = United Nations Environment Programme, EBRD = European Bank for Reconstruction and Development.

2.2.4 Funding proposals disbursed and under implementation

14. The GCF has made disbursements to 11 projects, totalling USD 52.27 million. There are the private sector projects that made subsequent disbursements after the first disbursement. Acumen KawiSafi ventures fund (FP005) made the first GCF investment on the ground and reported an increased access to energy for the households in Rwanda and Kenya through investee companies providing off-grid solar solutions. For XacBank business loan programme for GHG emissions reduction (FP028), the GCF has disbursed its total commitment of USD 20 million to XacBank and received interests accrued for the loan disbursed.

Table 6. List of projects and programmes disbursed

6 Projects/programmes are considered to have reached disbursement on the date the funds have been received by

the accredited entity.

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Project reference

AE Project title Country Disbursed

amount (USD)

FP001 Profonanpe Building the resilience of wetlands in the province of Datem del Marañón in Peru

Peru 1,022,186

FP005 Acumen KawiSafi ventures fund Rwanda

and Kenya

6,427,001

FP007 UNDP Supporting vulnerable communities in Maldives to manage climate change induced water shortages

Maldives 3,034,330

FP010 UNDP De-risking and scaling-up investment in energy efficient building retrofits

Armenia 729,000

FP015 UNDP Tuvalu coastal adaptation project Tuvalu 2,013,841

FP016 UNDP

Strengthening the resilience of smallholder farmers in the dry zone to climate variability and extreme events through an integrated approach to water management

Sri Lanka

2,867,879

FP019 UNDP Priming financial and land-use planning instruments to reduce emissions from deforestation

Ecuador 7,901,895

FP023 EIF Climate resilient agriculture in three of the vulnerable extreme northern crop growing regions

Namibia 3,085,000

FP024 EIF Empower to adapt: creating climate change resilient livelihoods through community based natural resource management in Namibia

Namibia 427,013

FP028 XacBank Business loan programme for GHG emissions reduction

Mongolia 20,000,000

FP037 UNDP Integrated flood management to enhance climate resilience of the Vaisigano River catchment in Samoa

Samoa 4,766,361

Total 52,274,506

Abbreviations: AE = accredited entity, EIF = Environmental Investment Fund of Namibia, UNDP = United Nations Development Programme.

15. In addition to the disbursement to the projects, the GCF has provided fees to the accredited entities as agreed in the FAAs. The cumulative amount of accredited entity fees paid to date in respect of the projects listed above is USD 2.26 million.

III. Challenges

3.1 Challenges in portfolio management

16. In implementing the post-approval process, the Secretariat has faced the following major challenges which have delayed the conclusion of FAAs in respect of approved funding proposals:

(a) A large number of approved funding proposals have been brought forward by entities which have not yet finalized the AMA with the GCF;

(b) Lack of terms sheets in relation to projects approved at the eleventh meeting of the Board (B.11) and matters relating to accredited entity fees; and

(c) Large number of conditions attached to approved funding proposals.

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17. Accredited entities without AMAs. As noted in paragraph 9 above, many approved funding proposals are with entities which have not finalized their AMA with the GCF. This means drafting of the related FAAs cannot commence. This creates a significant time lapse between the Board’s approval and the actual disbursement and creates reputational risk for the GCF, particularly with beneficiary countries. Significant delays between Board approval and AMA finalization also creates practical problems with respect to the implementation of approved funding proposals. Proposed budgets may change owing to changes in prices and/or exchange rates, inception reports may be required to ensure that the project as originally proposed is still viable notwithstanding the delay and co-financing commitments may be at risk.

18. In this context, decision B.17/09 will mitigate this risk to an extent for future funding proposals. With respect to previously approved funding proposals, the Secretariat is committed to finalizing the relevant AMAs with the utmost urgency. It should be noted, however, that finalization of the AMA requires the consent of the relevant accredited entity, something which is outside the control of the GCF.

19. Lack of term sheets for B.11 projects and accredited entity fees. The lack of term sheets relating to an approved funding proposal, and the negotiation of the accredited entity fee leads to prolonged FAA negotiations. In relation to the lack of terms sheets, this is a factor with respect to funding proposals approved at B.11. Terms sheets typically set out the main elements of the relevant transaction, and these do not need to be renegotiated at the FAA stage. While some of the relevant elements are set out in the funding proposal, others are not and need to be negotiated from scratch, based on the details in the funding proposed. Early funding proposals often lacked the necessary information and so have to be dealt with post-approval. This increases the time necessary to reach agreement on the FAA.

20. In relation to the accredited entity fee, the Secretariat faces difficulty in negotiating fees with accredited entities in the absence of detailed guidance on this matter beyond that set out in decision B.11/10, annex II. In particular, obtaining justifications and supporting evidence from the accredited entity for the requested fee takes a substantial amount of time and leads to delay in signing FAAs. It is expected that the report titled “Financial terms and conditions” (under preparation) will provide a solution to the problem, if adopted, and once implemented.

21. Since the thirteenth meeting of the Board, term sheets are negotiated before Board approval of the relevant funding proposal. This allows for quicker FAA negotiations as many core elements of the deal are agreed in advance. In relation to delays arising from negotiations on the accredited entity fees, a revised fee policy is under development for the Board’s consideration and the Secretariat expects that such revised policy will provide greater clarity on this issue and help to streamline these discussions with the accredited entities.

22. Large number of conditions. The large number of conditions attached to approved funding proposals, especially those from direct access entities, have also resulted in delays in the period prior to FAA signing. In particular, some of the conditions may be viewed as onerous and/or impractical and take time for the accredited entity to assess and subsequently fulfil. Clearance of such conditions on the part of the Secretariat often takes time as multiple divisions may need to be involved. As noted by the Secretariat at the seventeenth meeting of the Board, many of these conditions were attached due to the funding proposal not being ready.

23. The Board has taken a number of steps to address this issue and the Secretariat expects that going forward, this will be less of a concern. Specific steps that the Board has taken, and which are being acted upon by the Secretariat, include:

(a) The ability of the Secretariat to not submit a funding proposal to the Board if either it or the independent Technical Advisory Panel do not recommend the project for approval;

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(b) The request to the Secretariat to prepare an interim policy on restructuring and cancellation (under preparation); and

(c) The ability to not apply a particular condition if it is considered to be inconsistent with GCF policies.

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Annex I: Status of the fulfilment of the conditions applied to approved projects and programmes

1. Table 7 presents the status of the following, in each case only to the extent a disbursement has not been made in relation to the relevant project/programme:

(a) The conditions adopted by the Board and applicable to all projects/programmes which must be met prior to the execution of a funded activity agreement (FAA);

(b) Those conditions adopted by the Board and applicable to all projects/programmes approved at the eleventh meeting of the Board1 which must be met prior to disbursement, and which were, at subsequent Board meetings, classified as conditions to be met prior to the execution of the relevant FAA;

(c) The project/programme specific conditions adopted by the Board which expressly state that they must be met prior to the execution of the relevant FAA;

(d) The project/programme specific conditions adopted by the Board which expressly state that they must be met prior to the effectiveness of the relevant FAA; and

(e) The conditions adopted by the Board which must be met prior to disbursement for those projects/programmes for which all conditions related to the execution and effectiveness of the FAA have been met.

2. For the avoidance of doubt, table 7 does not include the status of:

(a) The conditions adopted by the Board and applicable to all projects/programmes relating to the completion of all legal due diligence except in cases where the FAA has been executed, as the satisfaction of this condition is an ongoing process which will only be met once an FAA is ready to be executed;

(b) The project/programme specific conditions adopted by the Board for which no expressed time frame for satisfaction has been stated, and for which time frames shall be agreed by the Secretariat and the accredited entity prior to the execution of the FAA;

(c) The other conditions adopted by the Board which are expected to be met over different time periods following the effectiveness of the FAA (including, but not limited to, conditions to be met prior to disbursement), and therefore are not relevant until such effectiveness has been enacted;

(d) The conditions that must be met prior to the execution and effectiveness of the FAA which are not included in the lists of conditions and recommendations annexed to decisions B.11/11, B.13/23, B.14/07, B.15/07 and B.16/02;2 and

(e) Matters referred to in the recommendations annexed to the above-mentioned decisions which are not conditions (e.g. covenants with which the accredited entity will need to comply at different times between Board approval and the end of project implementation; these matters will be addressed in the relevant FAA).

3. The types of conditions referred to in paragraph 2(b), (c) and (d) above include, but are not limited to:

(a) The conditions approved by the Board when accrediting the relevant accredited entity;

1 Decision B.11/11. 2 For example, certain conditions to be met prior to the execution and effectiveness of the FAA are set out only in the

term sheets for the relevant project/programme.

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(b) The conditions relating to the environmental and social safeguards necessary for the relevant project/programme;

(c) Securing and/or reporting on co-financing;

(d) The technical conditions to enhance the quality and/or impact of proposals and mitigating implementation risks (e.g. the financial management capacity of the executing entity, the operation and maintenance plan, etc.); and

(e) The conditions and covenants which set out the types of activities that the GCF cannot, in the context of a specific project/programme, finance (e.g. the financing of scholarships, and disaster response and relief activities).

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Table 7. Status of condition fulfilment for approved project/programmes in the GCF portfolio (as at 20 August 2017)

Type Time frame Description of condition Status Remarks

FP001: Building the resilience of wetlands in the Province of Datem del Marañón in Peru (Profonanpe)

The first disbursement was made to this project in May 2017

FP002: Scaling up the use of modernized climate information and early warning systems in Malawi (UNDP)

The FAA became effective in June 2017

General Conditions to be met prior to disbursement

Finalization of legal documentation Met

Fulfilment of conditions precedent set out in the FAA Not met

FP003: Increasing the resilience of ecosystems and communities through the restoration of the productive bases of salinized lands in Senegal (CSE)

General Conditions to be met prior to the execution of the FAA

AE internal approval Met

AMA finalized Met Executed on 24 October 2015 and effective on 26 March 2016

Conditions to be met prior to disbursement

Finalization of legal documentation Not met1 Discussions relating to the project are ongoing

FP004: Climate resilient infrastructure mainstreaming in Bangladesh (KfW)



AMA finalized Not met Executed on 15 December 2016 but not yet effective (legal opinions pending)


Finalization of legal documentation Not met Draft FAA under negotiation

FP005: KawiSafi ventures fund (Acumen)

The first disbursement was made to this project in September 2016

FP006: Energy efficiency green bond in Latin America and the Caribbean (IDB)

General AE internal approval Not met To be provided after the AMA has been finalized

1 Pursuant to decision B.BM-2017/06, the deadline for entering into the funded activity agreement in connection with this funding proposal has been extended by 24 months from 12

June 2017.

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Conditions to be met prior to the execution of the FAA

AMA finalized Not met AMA approved, pending signature


Finalization of legal documentation Not met Negotiation of draft FAA pending AMA signing

FP007: Supporting vulnerable communities in Maldives to manage climate change induced water shortages (UNDP)

The first disbursement was made to this project in July 2017

FP008: Urban water supply and wastewater management project in Fiji (ADB)


AE internal approval Not met To be provided after the AMA has been signed

AMA finalized Not met AMA to be signed on 17 August 2017



FP009: Energy savings insurance for private energy efficiency investments by small and medium-sized enterprises (IDB)


AE internal approval Not met To be provided after the AMA has been finalized

Finalization of legal documentation Not met AMA approved, pending signature

Negotiation of draft FAA pending AMA signing

Project-specific

Conditions for the effectiveness of the FAA

Delivery of a certificate which has been issued by an authorized legal officer of IDB, confirming that the FAA entered into by the IDB has been duly authorized, duly executed and delivered on behalf of the IDB, and is binding upon the IDB in accordance with its terms

Not met To be issued after FAA is finalized

FP010: De-risking and scaling-up investment in energy efficient building retrofits (UNDP)

The first disbursement was made to this project in August 2017

FP011: Large-scale ecosystem-based adaptation in the Gambia: developing a climate-resilient, natural resource-based economy (UNEP)

The FAA became effective in August 2017

General Conditions to be met prior to the first disbursement


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Project-specific

Conditions to be met prior to the first disbursement

Develop and submit to the GCF a fiduciary risk plan, that, inter alia, outlines

the measures that UNEP will take for enhanced oversight and monitoring of

project funding, including in-country funding

Not met

Delivery of a letter by UNEP confirming that the management rights of the

78 forests where the project will be implemented were transferred to

community management in the Gambia

Not met

FP012: Africa Hydromet program – strengthening climate resilience in sub-Saharan Africa: Mali country project (WB)


AE internal approval Not met AE requested an extension which was granted through a limited distribution decision

Finalization of legal documentation Not met AMA negotiations ongoing

Negotiation of draft FAA pending AMA finalization

Project-specific


Delivery of a certificate issued by the World Bank’s Legal Officer, in a form that is satisfactory to the GCF, confirming that the FAA entered into by the World Bank has been duly authorized or ratified by all necessary corporate actions, duly executed and delivered on behalf of the World Bank, and is binding upon the World Bank in accordance with its terms


FP013: Improving the resilience of vulnerable coastal communities to climate change related impacts in Viet Nam (UNDP)

The FAA became effective in July 2017


Fulfilment of conditions precedent set out in the FAA Not met Request for disbursement not submitted by UNDP

FP014: Climate Adaptation and Mitigation Program for the Aral Sea Basin


AE internal approval Not met AE requested an extension which was granted through a limited distribution decision

Finalization of legal documentation Not met AMA negotiations ongoing

Negotiation of draft FAA pending AMA finalization

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Project-specific

Condition for the execution of the FAA

The accredited entity provides to the Board, through the Secretariat, satisfactory evidence of the following:

(a) Details on how the project intends to achieve transformational change and provide a theory of change, including long-term sustainability criteria;

(b) Further details on how the long-term financial sustainability of the project will be secured, including an assessment of the opportunities for the mobilization of future finances;

(c) Details on the key barriers, including legal and regulatory frameworks, which may impact project effectiveness and efficiency;

(d) Details on the selection criteria that will be used to inform approval or otherwise of sub-investments;

(e) Details on how the accredited entity will ensure that the project activities will complement and not overlap with existing projects in the region, as well as the project’s intended interaction with other projects financed by the World Bank Group;

(f) An overview of the local political context and a detailed assessment of political and governance risks in each of the project’s host countries;

(g) Details on how the project will fully integrate gender considerations into the project’s approach and its results targets;

(h) Details on the rationale behind the project’s use of grant funding by the GCF as opposed to other instruments (e.g. loans); and

(i) Details on the stakeholder groups consulted by the accredited entity during the design of the project

Not met


Delivery of a certificate issued by the World Bank’s Legal Officer, in a form that is satisfactory to the GCF, confirming that the FAA entered into by the World Bank has been duly authorized or ratified by all necessary corporate actions, duly executed and delivered on behalf of the World Bank and is binding upon the World Bank in accordance with its terms


FP015: Tuvalu coastal adaptation project (TCAP) (UNDP)


FP016: Strengthening the resilience of smallholder farmers in the dry zone to climate variability and extreme events through an integrated approach to water management (UNDP)


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FP017: Climate action and solar energy development programme in the Tarapaca Region in Chile (CAF)


AE internal approval Not met First legal opinion relating to internal approvals submitted to the Secretariat on 31 January 2017. Additional internal approvals are still pending2

Finalization of legal documentation Not met AMA executed on 15 November 2016 but not yet effective (legal opinions pending)

Negotiation of draft FAA pending the conclusion of term sheet revisions

Project-specific

Condition for the effectiveness of the FAA

The loan agreement executed with the executing entity for the implementation of the project shall contain the following with respect to any carbon credits existing or future in relation to the project: (a) a covenant on the prohibition of the use of such carbon credits by the executing entity; and (b) the undertaking by the executing entity to cancel/retire such carbon credits

Not met This condition will be addressed through the inclusion of an appropriate covenant in the FAA

FP018: Scaling-up of glacial lake outburst flood (GLOF) risk reduction in Northern Pakistan (UNDP)




Project-specific

Conditions to the first disbursement

Completion of the detailed evaluation of the financial management capacity of the Ministry of Climate Change and the potential Responsible Parties, under the UNDP Framework for Cash Transfer to Implementing Partners as satisfactory to implement the project

Not met

FP019: Priming financial and land-use planning instruments to reduce emissions from deforestation (UNDP)


FP020: Sustainable energy facility for the Eastern Caribbean (IDB)

2 There is an inconsistency between decisions B.14/12, paragraph (c), and B.15/10, paragraph (i)(vii). Notwithstanding that decision B.15/10, paragraph (i)(vii), purports to extend

the deadline for entering into the FAA for FP017, the effect of such a decision is to shorten the relevant deadline established in decision B.14/12, paragraph (c), in respect of FP017. Accordingly, decision B.14/12, paragraph (c), should prevail in relation to the relevant deadlines.

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Project-specific


Delivery of a certificate, which has been issued by an authorized Legal Officer of the IDB, confirming that the FAA entered into by the IDB has been duly authorized, duly executed and delivered on behalf of the IDB, and is binding upon the IDB in accordance with its terms


FP021: Senegal integrated urban flood management project (AFD Senegal)


AE internal approval Not met

Finalization of legal documentation Not met AMA under negotiation

Negotiation of the draft FAA pending finalization of the AMA

Project-specific


Delivery of a certificate issued by the accredited entity’s Senior Legal Officer, in a form that is satisfactory to the GCF, certifying that the FAA entered into by the accredited entity has been duly authorized or ratified by all necessary corporate actions, duly executed and delivered on behalf of the accredited entity, and is binding upon the accredited entity in accordance with its terms


FP022: Development of Argan orchards in degraded environment – DARED (ADA Morocco)




Project-specific


Submission of evidence by ADA confirming that ANDZOA, as executing entity for the project, has obtained all necessary land rights which are required for the

implementation of the project according to the planting schedule of the first year

Not met

Completion of ADA’s evaluation/assessment of ANDZOA’s financial and procurement capacity, including assessment of ANDZOA’s procurement policies and procedures.

Not met

Provision of a revised logical framework including adaptation indicators Not met

GCF/B.18/08 Page 17


Monitoring arrangements satisfactory to the GCF for the establishment of argan orchards and ecosystem health of natural argan forests adjacent to the project

Not met

A detailed procurement plan and detailed budget in the form and substance

satisfactory to the GCF

Met

FP023: Climate resilient agriculture in three of the vulnerable extreme northern crop growing regions (CRAVE) (EIF Namibia)

The first disbursement was made to this project in June 2017

FP024: Empower to adapt: creating climate change resilient livelihoods through community-based natural resource management in Namibia (EIF Namibia)

The first disbursement was made to this project in June 2017

FP025: Sustainable energy financing facilities (SEFF) (EBRD)



Finalization of legal documentation Not met AMA executed on 22 April 2017 and effective on 11 May 2017

Draft FAA under preparation

FP026: Sustainable landscapes in Eastern Madagascar (CI/EIB)



Finalization of legal documentation Not met AMA pending EIB’s Board approval on 19 September 2017

AMA with CI signed on 13 July 2017 but not yet effective

Negotiation of draft FAA pending finalization of EIB and CI AMAs

Project-specific


The accredited entities shall ensure that support will not be provided to any category A subprojects and activities as explicitly stated in the ESMP

Not met To be included as a covenant in the CI FAA

Specific to the CI funded activity agreement, the government approval for CI operating in Madagascar shall have been obtained

Not met

Specific to the EIB funded activity agreement, the following condition shall be incorporated:

(a) A new calendar of committed disbursements should be established for the class A shares, aligned to the calendar of the rest of the shareholders. It should set a limit on the annual amount of each reflow up to the accumulated amount it has already disbursed at that point;

Not met To be included in the EIB FAA or other relevant legal documentation

GCF/B.18/08 Page 18


(b) The shareholder agreement should oblige all the shareholders (class A and class B) to honour the disbursements on a proportionate basis at all times throughout the project’s lifespan; and (c) The commencement of the project should be conditional on the commitment of the class A investor or, if this is not possible, the guarantee of the AE related to it

FP027: Universal green energy access programme (UGEAP) (Deutsche Bank AG)



Finalization of legal documentation Not met AMA executed on 23 May 2017 but not yet effective.

Negotiation of the draft FAA pending effectiveness of the AMA

Project-specific


The lead syndication partner of UGEAP underwrites no less than 20% of a syndicated loan for an eligible investment against a maximum 70% of UGEAP take, with the possibility of the lead syndication partner selling down to no less than 15% of the loan principal, on a pro-rata basis with UGEAP. ‘Market-out’ clauses would be applicable to both the lead syndication partner and UGEAP

Not met To be included in the FAA or other relevant legal documentation

Deutsche Bank AG’s 3% participation in the capital of UGEAP is invested on a pro-rata basis with the GCF on each closing date

Not met To be included in the FAA or other relevant legal documentation

FP028: Business loan programme for GHG emissions reduction (XacBank)

The first disbursement was made to this project in May 2017

FP029: SCF capital solutions (DBSA)



Finalization of legal documentation Not met AMA executed on 8 September 2016 and effective on 12 January 2017

Draft FAA under negotiation

GCF/B.18/08 Page 19


Project-specific


The approval of the funding proposal shall be conditional on the following provisions being included in the FAA:

(1) In the event that the executing entity's advisory committee decides to actively pursue a portfolio of activities in one of the GCF adaptation results areas, the accredited entity shall, prior to the first disbursement by the executing entity in connection with such a result area, provide to the GCF:

(a) A revised logical framework for the relevant adaptation result area;

(b) The adaptation core indicators to quantify the number of direct and indirect beneficiaries;

(c) The relevant GCF performance management framework indicators for the selected adaptation impact; and

(d) Outcomes and project level indicators; and

(2) Each annual performance report required to be delivered to the GCF following the inclusion of a portfolio within an adaptation results area shall include the baselines and mid-term/final targets for the indicators referred to above

Not met To be incorporated into the FAA or other relevant legal documentation

FP030: Catalyzing private investment in sustainable energy in Argentina – Part 1 (IDB)





Project-specific


The approval of the funding proposal shall be conditional on the inclusion in the FAA of a covenant to the AE to ensure that any concessionality provided by the GCF is passed on to the underlying projects

Not met To be included as a covenant in the FAA.

FP033: Accelerating the transformational shift to a low-carbon economy in the Republic of Mauritius (UNDP)




Project-specific


Delivery by the accredited entity of an executed copy of the subsidiary

agreement, in the form of a UNDP project Document, between the accredited

entity and the executing entities

Met

GCF/B.18/08 Page 20


Submission of an updated procurement plan to the satisfaction of the GCF Not met

FP034: Building resilient communities, wetlands ecosystems and associated catchments in Uganda (UNDP)




Project-specific


Delivery to the GCF by the accredited entity of an executed copy of the subsidiary agreement, in the form of a UNDP project document, between the accredited entity and the executing entity

Not met

FP035: Climate information services for resilient development in Vanuatu (Van CIS RDP) (SPREP)



Finalization of legal documentation Not met3 AMA executed on 23 June 2016 and effective on 15 July 2016

Draft FAA under negotiation

Project-specific

Conditions to be met prior to be the execution of the FAA

The approval of the funding proposal shall be conditional on the inclusion in the FAA of a covenant that GCF proceeds will not be used to finance scholarships

Not met To be included as a covenant in the FAA

The accredited entity shall provide to the Board, through the Secretariat:

(a) The resubmission of the project budget, subject to the satisfaction of the Secretariat, with a view to improving cost-efficiency, particularly associated with the international consultancies and the equipment to be purchased, including the Doppler radar; and

(b) Justification for the revised budget

Not met

The approval of the funding proposal shall be conditional on the inclusion in the FAA of the new amount resulting from the budget revision


Conditions for effectiveness of the FAA

Delivery by the accredited entity of a certificate, in a form and substance that is satisfactory to the GCF, which has been signed by the most senior Legal Officer of SPREP confirming that the FAA entered into by SPREP has been duly authorized or ratified by all necessary corporate actions, duly executed and delivered on behalf of SPREP, and is binding upon SPREP in accordance with its terms

Not met To be issued after FAA finalization

3 Pursuant to decision B.BM-2017/06, the deadline for entering into the FAA in connection with this funding proposal has been extended by 120 days from 12 June 2017.

GCF/B.18/08 Page 21


The subsidiary agreement/executing partner agreement between SPREP and the Government of Vanuatu is duly signed and effective

Not met

Delivery by the accredited entity of a procurement plan in a form and substance satisfactory to the GCF

Not met

Delivery by the accredited entity of an indicative disbursement schedule for the disbursement of the GCF proceeds by the GCF for the implementation of the project

Not met

The project should deliver a long-term management and monitoring arrangement plan (beyond the four years of project completion), including a budget to ensure the sustainability and maintenance of the system

Not met

FP036: Pacific Islands renewable energy investment program (ADB)



Finalization of legal documentation Not met AMA to be signed on 17 August 2017

Negotiation of draft FAA pending AMA approval by ADB’s board and execution of the AMA

Project-specific

Conditions to met prior to the execution of the FAA

The approval of the funding proposal shall be conditional on the inclusion in the FAA of a covenant that GCF proceeds will not be used for project preparation activities such as feasibility studies, environmental and social safeguards documents, financial modelling and other related activities that are eligible for the GCF Project Preparation Facility. The USD 5 million grant for technical assistance under the GCF proceeds will only be used as a means to strengthen capacity-building and sector reform


The amount of USD 5 million in grant financing to support project preparation for subsequent subprojects shall be secured by the AE from internal sources. Additional grant financing for project preparation, as required, shall be secured by the AE from internal and external sources

Not met

Prior to the execution of the FAA, the AE shall submit to the Secretariat the revised funding proposal and associated documents reflecting the changes related to the removal of the project preparation activities from the GCF proceeds

Not met

GCF/B.18/08 Page 22


Conditions for effectiveness of the FAA

Delivery by the accredited entity of an indicative disbursement schedule for the disbursement of the GCF proceeds by the GCF for the implementation of the programme

Not met

Delivery of a certificate, in a form and substance that is satisfactory to the GCF, which has been signed by a Legal Officer of ADB, confirming that the FAA entered into by ADB has been duly authorized by all necessary corporate actions, duly executed and delivered on behalf of ADB, and is binding upon ADB in accordance with its terms

Not met To be issued after FAA finalization

FP037: Integrated flood management to enhance climate resilience of the Vaisigano River catchment in Samoa (UNDP)


FP038: GEEREF NeXt (EIB)



Finalization of legal documentation Not met Draft FAA pending finalization of the AMA

Project-specific


Execution of an AMA within 120 days of approval4 Not met AMA pending EIB Board approval on 19 September 2017

FP039: Egypt renewable energy financing framework (EBRD)



Finalization of legal documentation Met FAA executed on 16 August 2017 but not yet effective

Project-specific


Execution of an AMA within 120 days of approval Met AMA executed on 24 April 2017 and effective on 11 May 2017

FP040: Tajikistan: scaling up hydropower sector climate resilience (EBRD)




4 Pursuant to decision B.17/17, the deadline for execution of the AMA has been extended by a further 120 days from 4 August 2017.

GCF/B.18/08 Page 23


Project-specific



EBRD confirms in writing that:

(a) all mitigation measures set out in the Environmental and Social Assessment Procedures: (i) are fully estimated with respect to costs; (b) the ownership of, and responsibility for implementation is agreed and formally committed to; and (ii) are fully funded;

(b) There is sufficient funding and formal commitment for the long-term monitoring and evaluation of the implementation of all mitigation measures; and

(c) In the event the proposed mitigation measures prove to be insufficient or ineffective, there are clear mechanisms and funding for the remedial action

Not met

A written confirmation by the accredited entity to the GCF that:

(a) The funding proposal is in accordance with all transboundary water agreements applicable to Syr Darya river basin under the auspices of the Interstate Commission for Water Coordination of Central Asia;

(b) The funding proposal has been submitted to the downstream countries (Kazakhstan and Uzbekistan); and

(c) It has obtained confirmation from those countries that they are supportive of the implementation of the project specified in the funding proposal

Not met

FP041: Simiyu climate resilience project (KfW)



Finalization of legal documentation Not met FAA drafting pending AMA effectiveness

Project-specific


AMA effectiveness Not met AMA executed on 15 December 2016 but not yet effective (legal opinions pending)

FP042: Irrigation development and adaptation of irrigated agriculture to climate change in semi-arid Morocco (AFD)



Finalization of legal documentation Not met FAA drafting pending AMA effectiveness

AMA executed and effective Not met AMA under negotiation

GCF/B.18/08 Page 24


Project-specific


Initiate the Pubic Private Partnership framework to be developed as soon the project is approved

Not met

FP043: Saïss water conservation project (EBRD)



Finalization of legal documentation Not met Draft FAA under preparation

Project-specific



FP044: Tina River hydropower development project (World Bank)



Finalization of legal documentation Not met Negotiation of draft FAA pending AMA finalization

Project-specific


Execution of an AMA within 120 days of approval5 Not met AMA negotiations ongoing

The World Bank confirms in writing that (a) all mitigation measures set out in the Environmental and Social Impact Assessment and Management Plan: (i) are fully estimated with respect to costs; (ii) the ownership of, and responsibility for, implementation is agreed and formally committed to; and (iii) are fully funded; and

(B) That there is sufficient funding and formal commitment for the long-term monitoring and evaluation of the implementation of all mitigation measures, and that in the event the proposed mitigation measures prove to be insufficient or ineffective, there are clear mechanisms and funding for the remedial action

Not met

Conditions to be met prior to the effectiveness of the FAA

Delivery of a legal opinion or a certificate, in a form and substance that is satisfactory to the GCF Secretariat, which has been signed by a legal officer of the accredited entity confirming that the FAA entered into by the accredited entity has been duly authorized or ratified by all necessary corporate actions, duly executed and delivered on behalf of the accredited entity, and binding upon the accredited entity in accordance with its terms

Not met

FP045: Ground water recharge and solar micro irrigation to ensure food security and enhance resilience in vulnerable tribal areas of Odisha (NABARD)

5 Pursuant to decision B.17/17, the deadline for execution of the AMA has been extended by a further 120 days from 4 August 2017.

GCF/B.18/08 Page 25




Finalization of legal documentation Not met Draft FAA under preparation

Project-specific


AMA execution and effectiveness Met AMA executed on 27 July 2017 but not yet effective

Inclusion, under component 4 of the funding proposal, specific training be provided by NABARD for local farmers on organic farming, integrated pest management, agroforestry systems and small-scale wastewater treatment.

Not met

Abbreviations: ADA Morocco = Agency for Agricultural Development of Morocco, ADB = Asian Development Bank, AE = accredited entity, AFD = Agence Française de Développement, AMA = accreditation master agreement, ATPA = Agenda for Transforming Production in the Amazon, B.15 = fifteenth meeting of the Board, CAF = Corporación Andina de Fomento, CBO = community-based organization, CI = Conservation International Foundation, CSE = Centre de Suivi Ecologique, DBSA = Development Bank of Southern Africa, Deutsche Bank AG = Deutsche Bank AktienGesellschaft, EBRD = European Bank for Reconstruction and Development, EIB = European Investment Bank, EIF Namibia = Environmental Investment Fund Namibia, ESMP = environmental and social management plan, FAA = funded activity agreement, IDB = Inter-American Development Bank, KfW = Kreditanstalt für Wiederaufbau, MDBs = multilateral development banks, NABARD = National Bank for Agriculture and Development, REDD = reducing emissions from deforestation and forest degradation in developing countries, SBAA = standard basic assistance agreement, SPREP = Secretariat of the Pacific Regional Environment Programme, UNDP = United Nations Development Programme, UNEP = United Nations Environment Programme, WB = World Bank, XacBank = XacBank LLC.

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